One finite non-renewable resource, oil, has created serious problems for the world economy. Oil prices shot up from $ 2.23 a barrel in 1970 to $34.00 a barrel in 1982, creating a frantic search for alternative energy forms. Coal become popular again, and companies searched for practical means to harness solar, nuclear, wind, and other forms of energy.
The development of alternative sources of energy and more efficient ways to use energy and the weakening of the oil cartel led to a subsequent decline in oil prices. Lower prices had an adverse effect on the oil exploration industry but considerably improved the income of oil-using industries and consumers. In the mean time, the search continues for alternative sources of energy.
Increased Pollution levels
Some industrial activity will inevitably damage the natural environment. Consider the dangerous mercury levels in the ocean, the quantity
of DDT and other chemical pollutions in the soil food supply, and the littering of the environment with bottles, plastics, and other packaging materials.
Research has shown that about 42 percent of U.S. consumers are willing to pay higher prices for ―green‖ products. This willingness creates a large market for pollution-control solutions, such as scrubbers, recycling centers, and landfill systems. Smart companies are initiating environment – friendly moves to show their concern.
Changing Role of Governments
Governments vary in their concern and efforts to promote a clean environment. For example, the Germen Government is vigorous in its pursuit of environmental quality, partly because of the strong green movement in Germany and partly because of the ecological devastation in the former East Germany.
The major hopes are that companies around the world will accept more social responsibility and that less expensive devices will be invented to control and reduce pollution.
Sociocultural Forces
Every society has a culture that guides everyday life. In the environment of marketing, the world culture refers not to classical music, art, and literature but no social institutions, values, beliefs, and behaviours. Culture includes everything people learn as members of a society, but does not include the basic drives with which people are born.
Culture is shaped by humankind. It is learned rather than innate. For example, people are born with a need to eat – but what, when, and where they eat, and whether they season their food with ketchup or curdled goat‘s milk is learned from a particular culture.
Values and beliefs
A social value embodies the goals a society views as important and expenses a culture‘s share ideas of preferred ways of acting. Social values
reflect abstract ideas about what is good, right, and desirable (and bad, wrong, and undesirable). For example, we learn from those around us that it is wrong to lie or steal. The following social values reflect the beliefs of most people in the United States.
Freedom. The freedom of the individual to act as he or she pleases is a fundamental aspect of U.S. culture.
Achievement and success. The achievement of wealth and prestige through honest efforts is highly valued. Such achievement leads to a higher standard of living and improves the quality of life.
Work ethic. The importance of working on a regular basis is strongly emphasized. Those who are idle are considered lazy.
Equality. Most Americans profess a high regard for human equality, especially equal opportunity, and generally relate to one another as equals.
Patriotism/nationalism. Americans take pride in living in the ‗best country in the world.‖ They are proud of their country‘s democratic heritage and its achievements.
Individual responsibility and self-fulfilment. Americans are oriented toward developing themselves as individuals. They value being responsible for their achievements. The U.S. Army‘s slogan ―Be all that you can be‖ captures the essence of the desirability of personals growth.
A belief is a conviction concerning the existence or the characteristics of physical and social phenomena. A person may believe, for example, that a height-fat diet causes cancer or that chocolate causes acne. Whether a belief is correct is not particularly important in terms of a person‘s actions. Even totally foolish beliefs may affect how people behave and what they buy.It is the marketer‘s job to ―read‖ the social environment and reflect the surrounding culture‘s values and beliefs in a marketing strategy. Social values are changing
to play down work and to focus on family and on emotional enhancement of personal life.Values and beliefs vary from culture to culture.
Demographies
The terms demography and demographics come from the Greek word demos, meaning ―people‖ (as does the word democracy). Demography may be defined as the study of the size, composition (for example, by age or racial group), and distribution of the human population in relation to social factors such as geographic, boundaries. The size, composition, and distribution of the population in any geographic market will clearly influence marketing. Because demographic factors are of great concern to marketing managers.
The first macroenvironmental force that marketers monitor is population because people make up markets. Marketers are keenly interested in the size and growth rate of population in different cities, regions, and nations; age distribution and ethnic mix; educational levels; household patterns; and regional characteristics and movements.
Worldwide Population Growth
The World population is showing ―explosive‖ growth.The world population explosion has been a source of major concern, for two reasons. The first is the fact that concern resources needed to support this much human life (fuel, foods, and minerals) are limited and may run out at some point.
The second cause for concern is that population growth is highest in countries and communities that can least afford it. The less developed regions of the world currently account for 76 percent of the world population and are growing at 2 percent per year, whereas the population in more developed countries is growing at only 0.6 percent per year. In the developing countries, the death rate has been falling as a result of modern medicine, but the birthrate has remained fairly stable. Feeding, clothing and educating their children while also providing a rising standard of living is nearly impossible in these countries.
The explosive world population growth has major implications for business. A growing population does not mean growing markets unless these markets have sufficient purchasing power. Nonetheless, companies that carefully analyze their markets can find major opportunities. For example, to curb its skyrocketing population; the Chinese government has passed regulations limiting families to one child per family. Toy marketers, in particular, are paying attention to one consequence of these regulations.
Population Age Mix
National populations vary in their age mix. A Population can be subdivided into six age groups: preschool, school-age children, teens, young adults age 25 to 40, middle-aged adults age 40 to 65, and older adults age 65 and up. For marketers, the most populous age groups, shape the marketing environment.
Ethnic Markets
Countries also vary in ethnic and racial makeup. At one extreme is Japan, where almost everyone is Japanese; at the other is the United States, where people from come virtually all nations. The United States was originally called a ―melting pot,‖ but there are increasing signs that the melting didn‘t occur. Now people call United States a ―salad bowl‖ society with ethnic groups maintaining their ethnic differences, neighbourhoods, and cultures. The U.S.
population (267 million in 1997) is 73 percent white. African Americans constitute another 13 percent, and Latinos another 10 percent. The Latino population has been growing fast, with the largest subgroups of Mexican (5.4 percent), Puerto Rican (1.1 percent) and Cuban (0.4 percent) descent. Asian Americans constitute 3.4 percent of the U.S. population, with the Chinese constituting the largest group, followed by the Filipinos, Japanese, Asian Indians, and Koreans, in that order. Moreover, there are nearly 25 million
people living in the United States – more than 9 percent of the population--- who were born in another country.
Each group has certain specific wants and buying habits. Several food, clothing, and furniture companies have directed their products and promotions to one or more of these groups.
Educational Groups
The population in any society falls into five educational groups;
illiterates, high school dropouts, high school degrees, college degrees, and professional degrees. In Japan, 99 percent of the population is literate, whereas in the United States 10 percent to 15 percent of the population may be functionally illiterate. However, the United States has one of the world‘s highest- percentages of college-educated citizenry, around 36 percent. The high number of educated people in the United States spells a high demand for quality books, magazines, and travel.
Household Patterns
The ―traditional household‖ consists of a husband, wife and children (and sometimes grandparents). Yet, in the United States today, one out of eight households are ―diverse‖ or ―non-traditional‖ and include single live-alones, adult live-togethers of one or both sexes, single-parent families, childless married couples, and empty nesters. More people are divorcing or separating, choosing not to marry, marrying later, or marrying without the intention to have children. Each group has a distinctive set of needs and buying habits.
The gay market, in particular, is a lucrative one. Insurance companies and financial services companies are now waking up to the needs and potential of not only the gay market but also the non-traditional household market as a whole:
Geographical Shifts in Population
This is a period of great migratory movements between and within countries. Since the collapse of soviet eastern Europe, nationalities are reasserting themselves and forming independent countries. The new countries are making certain ethnic groups unwelcome (such as Russians in Latvia or Muslims in Serbia), and many of these groups are migrating to safer areas. As foreign groups enter other countries for political sanctuary, some local groups start protesting. In the United states, there has been opposition to the influx of immigrants from mexico, the Caribbean, and certain asian entrepreneurs are taking advantage of the growth in immigrant populations and marketing their wares specifically to these new members of the Population.
Shift from a Mass Market to Micro markets
The effect of all these changes is fragmentation the mass market into numerous micro markets differentiated by age, sex, ethnic background, education, geography, lifestyle, and other characteristics. Each group has strong preferences and is reached through increasingly targeted communication and distribution channels. Companies are abandoning the ―shotgun approach‖ that aimed at a mythical ―average‖ consumer and are increasingly designing their products and marketing programs for specific micro markets.